chapter thirteen

Question 1

decision

Answer 1

• process of selecting between alternatives
• i.e. considering whether one should eat a sandwich or pizza

Question 2

reasoning

Answer 2

• process associated with decision making
• i.e. the food item that looks freshly made would likely taste better

Question 3

judgement

Answer 3

• a decision that is made
• i.e. select the pizza that looks freshly made

Question 4

inductive reasoning

Answer 4

• reasoning based on observation and evidence
• conclusions probably true

Question 5

strength of an inductive argument based on:

Answer 5

• representativeness of observations
• number of observations
• quality of evidence

Question 6

heuristics

Answer 6

• “rules of thumb”; what worked in the past will work for the current problem
• i.e. availability and representativeness heuristics

Question 7

availability heuristic

Answer 7

events that are more easily remembered are judged as more probable events than are less easily remembered events

Question 8

representativeness heuristic

Answer 8

estimate probability by evaluating how similar it is to a prototype (how often one events resembles another event)

Question 9

conjunction rule

Answer 9

probability of two events happening together (conjunction) cannot be higher than the probability of the events each happening alone (single constituents)

Question 10

factors that could impact judgement

Answer 10

• law of large numbers
• myside bias
• confirmation bias
  -illusory correlation
• base rate
• backfire effect

Question 11

law of large numbers

Answer 11

large random sample drawn from a population will be more representative of that population

Question 12

myside bias

Answer 12

evidence is evaluated in such a way that it aligns with one’s own opinions and attitudes

Question 13

confirmation bias

Answer 13

selectively searching for information that conforms to one’s own beliefs

Question 14

illusory correlation

Answer 14

perceiving an association between two events when there is no relationship or, the relationship is weaker than what one thinks

Question 15

base rate

Answer 15

relative proportions of different classes in the population

Question 16

backfire effect

Answer 16

tendency for one’s viewpoint to become stronger when encountering facts that oppose their viewpoint

Question 17

deductive reasoning

Answer 17

determining if a conclusion logically follows from statements (aka premises)

Question 18

syllogism

Answer 18

consists of 2 premises and a conclusion

Question 19

categorical syllogism

Answer 19

• premise and conclusion begin with the term, all, none, or some
• premise 1: all birds are animals (all A are B)
• premise 2: all animals eat food (all B are C)
• conclusion: therefore, all birds eat food (all A are C)

Question 20

mental model approach

Answer 20

construction of a mental model or, imagined representation (mental images) of the situation to help solve a reasoning problem

Question 21

conditional syllogism

Answer 21

• premise 1 starts with “if… then”
• premise 1: if a buy a car, then i’ll have less money
• premise 2: i bought a car
• conclusion: therefore, i’ll have less money

Question 22

utility

Answer 22

desired outcome because it is in one’s best interest

Question 23

expected utility theory

Answer 23

people are rational so when all relevant information is known, a decision will be made that maximizes the expected utility

Question 24

problems for utility approach

Answer 24

• not necessarily money, people find value in other things
• many decisions do not maximize the probability of the best outcome

Question 25

decisions guided by expected emotions

Answer 25

- predicting how one would feel about a particular outcome - people are inaccurate with predicting emotions

Question 26

decisions guided by incidental emotions

Answer 26

- emotions unrelated to decision making that affect it, such as your optimism (personality), calming music (environment), dealing with a shitty customer (recent experience)

Question 27

opt-in procedure

Answer 27

choice presented with an "opt-in" option

Question 28

opt-out procedure

Answer 28

choice presented with an "opt-out" procedure

Question 29

status quo bias

Answer 29

- people often have it - tendency to do nothing when faced with making a decision

Question 30

framing effect

Answer 30

- the way a situation is worded (framed) influences decision making - you can word a situation to make it sound positive or negative - risk aversion/taking strategy

Question 31

risk aversion strategy

Answer 31

used when a problem is stated in gains

Question 32

risk taking strategy

Answer 32

used when problem is stated in terms of losses

Question 33

neuroeconomics

Answer 33

- study of decision making that combines psychology, neuroscience and economics - finding from neuroeconomic research is that decisions are influenced by emotions and that, the emotions are associated with specific brain areas

Question 34

samfey et al.

Answer 34

- ultimatum game - proposer offers to split sum of money and responder accepts/rejects the offer - findings show that responders tend the reject low offers because they were angry about the unfairness - strong activation in right anterior insula (associated with pain) during rejecting - more likely to accept a computer